A custom manufacturer of automobile bodies for many years had been costing its work in progress using the direct cost method, whereas the Crown reassessed on the basis that the company should have been using absorption costing (or the "on-cost" method, as it was termed). Use of the on-cost method was rejected because of the uncertainties of determining what overheads should be allocated to the work-in-progress (per Viscount Simonds, the "taxpayer should not be put to any risk of being charged with a higher amount of profit than can be determined with reasonable certainty"), and because the per-unit allocation of overheads would rise in an "idle and unprofitable year" under that method. Lord Reid stated that "if a method has been applied consistently in the past, then it seems to follow that it should not be changed unless there is a good reason for the change sufficient to outweigh any difficulties in the transitional year."
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